Summary of Balance Sheet Media Conference of 4 May, 1999

Despite a tough environment for both the electricity business and the engineering and electrical installation sectors, the Atel Group managed to maintain high earnings and a strong financial capacity throughout the 1998 business year. Energy sales reached an all-time high of 26,895 million kWh. The Atel Group's consolidated turnover rose 14% to CHF 1,815 million, and cash flow set a new record at CHF 595 million. The Atel Group achieved good operating results, with earnings before interest and taxes (EBIT) reaching CHF 325 million. An exceptional provision of CHF 100 million was set aside to protect against the risks relating to market deregulation, as a result of which consolidated profit stands at CHF 98 million. At the Annual General Meeting, the board of directors is to propose an unchanged dividend of CHF 18.--.

Atel Group - good operating results

Despite disruptive influences from the Asian region, Europe's markets benefited from the economic recovery that took place in 1998. This upturn was reflected in the electricity market, but the first effects of market deregulation were also felt and pressure on prices and margins intensified. Over the past business year, the Atel Group has had to assert itself in electricity trading and the engineering and electrical installations sectors in a tough environment. Nevertheless, it was able to lift energy sales by 16% to an all-time high of 26.9 billion kWh, due principally to the expansion of short-term electricity trading. Electricity sales in northern Switzerland's and Sopraceneri's supply area increased slightly.

The Atel Group's consolidated turnover rose 14% to CHF 1,815 million in the 1998 business year and reported operating expenditure was CHF 1,535 million. Both rises were due mainly to the increase in electricity trading sales and also to the Kummler+Matter Group's full consolidation. The Atel Group achieved good operating results, with earnings before interest and taxes reaching CHF 325 million. In view of the imminent deregulation of electricity markets throughout Europe, an exceptional provision of CHF 100 million was set aside to protect Atel against the risks of market deregulation, as a result of which consolidated profit stands at CHF 98 million. Cash flow set a new record at CHF 595 million or 32.8% of turnover, i.e. a rise of CHF 26 million or 4.6% compared to 1997. In 1998, the Atel Group's investments totalled CHF 433 million and were again sourced internally. Most of the investments were channelled into Atel Co. Ltd's tangible fixed assets, into financial assets to secure the disposal of nuclear waste and into acquiring the 5% stake in AEM Milan.

Despite the sustained pressure of competition, Atel Co. Ltd, still the most significant Group company, managed to increase net turnover by 6.7% and again report good earnings on operating activities before interest and taxes of CHF 169 million. The Ticino-based Sopracenerina Group increased consolidated turnover as well as profit levels, whereas the Colenco Group was prevented from developing new markets by the deregulation of European energy markets, the financial crisis in South-East Asia and Latin America, and the recession in Eastern Europe. Nevertheless, the Colenco Group's reported figures were in the black. The electrical installation companies' consolidated net turnover rose to CHF 156.0 million due to the integration of the Kummler+Matter Group. Cash flow rose to CHF 7.1 million and earnings were also higher at CHF 3.0 million. The Kummler+Matter Group's financial position improved significantly thanks to a successful restructuring programme. The electrical installation companies in the Olten region and in Ticino reported healthy results.

Atel is expecting Group turnover and results for the 1999 business year to remain at the prior year's high levels.

Atel has good medium-term growth prospects thanks to excellent market positioning, core competence in energy trading, various partnerships, and a healthy financial position. Nevertheless, the opening-up of European electricity markets will also impact negatively on Atel's financial position through its effects on existing market positions, contracts and margins, and will lead to a downward correction in normal earnings levels from 2000. It will depend not least on what form the Electricity Market Act (EMG) will take, as this will provide for free competition within the sector.

Aare-Tessin Ltd. for Electricity Corporate Communications